Iran has put together a package for $25 billion of investment in its booming power industry which is key to the country’s economic recovery, head of Iran Power Transmission, Generation and Distribution Company (Tavanir) says.
“Iran’s power industry is facing an average growth of 5% (in energy demands) a year which calls for building annually 5,000 megawatts of additional power generation capacity at minimum,” Arash Kordi said.
The country needs to invest $7-8 billion a year in its power generation and distribution sector in order to keep pace with its growing demands, the official said.
“The package for investment by foreign companies in various sectors of electric power industry at a sum of $25 billion has been prepared,” Kordi said.
With the imminent lifting of sanctions, Iran is pushing through a series of measures to revitalize its economy which is currently immersed in a deep recession.
“In the post-election period next year, we will witness a growth and boom in the industry sector which will entail in a 7% growth in energy consumption,” Kordi said.
Iran’s total power capacity stands at 74,000 megawatts which the country plans to raise to 100,000 MW in the next few years, according to Energy Minister Hamid Chitchian.
The government has drafted plans to expand the distribution network, cut waste, reduce consumption by raising domestic and industrial tariffs and invest in the renewable energy sector.
“It is absolutely wrong to think we can achieve economic growth without having sufficient electricity production,” Chitchian has said.
However, the challenges are many and while energy demands are growing at 5% a year, growth in capacity is limited to a third of that.
Power outages were becoming an occasional occurrence before the West imposed new sanctions on Iran in 2011 but the phenomenon has become less of an issue in recent years partly due to the shrinking of economy.
As the country heads for the post-election era, the demand for electricity gets strenuous.
Earlier this month, Government spokesman Mohammad Baqer Nobakht said an agreement worth $6 billion had been signed with an unnamed European company to build 4,250 megawatts of power capacity in the country.
On Monday, Iran’s Ministry of Energy signed an agreement with a German company to build 1,250 megawatts of solar energy projects in the hydrocarbon-rich country’s latest move to green its energy supply chain.